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Europe, US make „decisive progress” in airline talks

European Union regulators plan to ask EU governments to deregulate the €13.6 billion ($18 billion) trans-Atlantic airline market, saying talks with US officials this week were successful in producing a new draft accord.

The European Commission made „decisive progress” in negotiations with the US and will ask EU governments to endorse an „open-skies” agreement on March 22, commission spokesman Michele Cercone told reporters today in Brussels. The commission, the 27-nation EU's regulatory arm, will provide details of the agreement later today, Cercone said. An open-skies pact would allow EU-based airlines to make trans-Atlantic flights from any of the bloc's nations instead of from just their home country.

It would also scrap rules letting only British Airways Plc, Virgin Atlantic Airways Ltd., United Airlines and American Airlines fly between the US and London's Heathrow airport, Europe's busiest. Britain, which accounts for 40% of the market, spearheaded opposition that killed a draft open-skies accord in June 2004. Efforts to revive the initiative faltered in December when the US abandoned plans to give foreign investors in its airlines more control.

The EU had said the new foreign-ownership rule was necessary to overcome a perceived imbalance resulting from the existing right of US carriers to fly between nations in Europe. EU carriers can't offer service between US states. To make up for the loss of the ownership rule, the US said it was willing to explore five other areas. These were: clarifying that foreigners can own as much as 49% of non-voting equity in US carriers; letting EU carriers fly between the US and third countries such as Mexico; loosening requirements that federal workers travel on US carriers; letting EU carriers set up US franchises; and committing to additional talks after an initial accord is reached. (Bloomberg)